WASHINGTON – An Equifax error has left thousands of consumers concerned about how the error could affect their credit scores and reports. A coding issue caused the credit bureau to misstate the creditworthiness of a small percentage of consumers.
The errors occurred over three weeks between mid-March and early April. An analysis by Equifax shows that there was no shift in most credit scores. For consumers who experienced a change, only a small number would have received a different credit decision, Equifax said in a statement.
TIED TOGETHER: Equifax misrepresented the creditworthiness of some consumers
Equifax said fewer than 300,000 consumers had a score shift of 25 points or more. Such a drastic change in a person’s credit rating could affect their ability to secure a loan, line of credit, mortgage, and the amount of interest you pay on a loan.
A Florida woman sued Equifax, claiming she was denied a car loan because of a 130-point error on her credit report, which she says is part of a larger group of credit score errors the rating agency reported earlier this spring have made.
Here’s how to tell if you’ve been affected by the Equifax disruption
Determining whether or not your credit has been compromised is a challenge. However, monitoring your credit reports is a must. Bruce McClary, senior vice president of communications at the National Foundation for Credit Counseling, told FOX Television Stations:
“If you were one of those people who were in the market looking for a loan or line of credit between March and April and from what you see you think it’s possible that the lender’s decision was the result of some of the If you receive incorrect information from Equifax, you can return to that lender and have a discussion. You can reapply for the loan when your credit rating has recovered. It’s always a good idea to check your credit report and credit history before contacting a lender to know where you stand, so you should take that extra step before going back to the lender and trying again.”
Al Bingham, a loan officer at Momentum Loans in Salt Lake City, Utah, tells FOX Television Stations that consumers need to find out if they borrowed between March 17 and April 6.
“Lenders give you a disclosure, which typically tells you the credit bureau and the FICO score used by the lender. If this disclosure to auto lenders includes the Equifax FICO score, it could be a concern for that consumer,” Bingham explained. “With mortgage loans, this is much harder for consumers to see. All three FICO scores are used in mortgage origination. If any of these are wrong, like the Equifax FICO score, it can affect the entire loan approval, interest rate, fees, and pricing of the mortgage.”
What is the timeline to have such an error corrected on your credit report?
McClary advises consumers to look at their credit reports to see if there are any errors. He explains that you can contact the credit bureau, who will conduct an investigation.
“If there’s an error on your credit report that someone reported in error, you can dispute it with the credit bureau that reported the incorrect information. You have 30 days to investigate this. The credit bureau will contact the lender with this information to make sure it is corrected or correct, and they will then come back with a correction or an indication that the creditor has provided additional evidence to show that what they have reported are correct. They like to wait too long and act quickly when you find a mistake because it can hurt you.”
Check your credit report for errors
Regardless of whether the credit report affected you, McClary says it’s good practice to monitor your credit score and your credit score in case there are any discrepancies on your report.
“This is a good opportunity to be aware of your creditworthiness when you go to the market and borrow and you should be aware of what is showing up on your credit. It’s good to run a credit report to see what it says. If you haven’t in a while, you should do it now just to see if there are any bugs affecting your credit score or something you need to address immediately. You can do that by going to annualcreditreport.com, a website set up by the big three credit reporting agencies. At the moment you can receive a free copy of your report weekly based on the changes made during the pandemic.”
Contact your lender and Equifax
If you’re affected by the error, McClary suggests contacting your lender to reevaluate your application or loan terms.
“It’s also about talking to your lender if they denied you a loan or line of credit in March or April and used data from Equifax to make their decision,” McClary continued. “You may wish to speak to the lender about reapplying for this decision or reconsidering whether or not your credit score has recovered as a result of the Equifax issue being corrected, otherwise you will have to wait for a response from Equifax and the credit bureaus.” what they find to see who was directly affected.”
While Bingham shares McClary’s stance on working with a lender, he emphasizes the importance of monitoring your FICO credit score, which can make a difference when it comes to getting a loan or a cheap mortgage rate.
“There is no real solution out there for consumers. First, most consumers have no idea what their lender’s three classic FICO scores are, and second, how that score is used by each lender,” Bingham said. “Consumers need to follow the right information. The consumer needs to see if they have taken out a mortgage or car loan during this period and if so, they need to contact their lender to see what they can do.
“Car loans are a simpler process. The lender will pull the current Equifax FICO credit score, and if that’s higher than when you borrowed, I imagine the lender would give you a lower interest rate. But with mortgages, it’s more complex. If one rating is different, it will affect the other two credit ratings and possibly the loan approval and interest rate on the mortgage.”
Bingham added: “This is very good advice for any consumer looking to buy a home. Track your three classic FICO credit scores. Consumers can use either of these two websites: myfico.com (by FICO) or mycreditplan.org (certified credit advisor with a score improvement program). You have to pay for this information. Know your three FICO scores, find ways to improve them, and then track progress for those three FICO credit scores on a monthly basis. This could save you thousands of dollars.”
If you or someone you know may be affected, you can contact the Equifax Customer Service Department at 1-888-378-4329.
The Associated Press contributed to this story. This story was reported from Washington, DC